In a recently settled False Claims Act case, the Department of Justice (DOJ) highlighted several alleged practices that offer important lessons for compliance professionals. While the case settled with no admission of wrongdoing, the allegations serve as a useful tool for identifying behaviors that may increase an organization’s False Claims Act risk.
On our podcast this week, we discuss three red flags compliance professionals should keep on their radar.
1. EMR pre-programming that drives billing or documentation
Electronic medical records (EMR) often use templates and drop-down menus—but when those tools limit provider choice or auto-generate documentation that doesn’t reflect the actual service provided, it becomes a problem.
In this case, the DOJ alleged that the EMR was programmed to default to higher-intensity wound-care codes and even inserted scripted physician observations that supported those codes. Compliance teams should periodically review EMR build-outs, default settings, and auto-documentation features to ensure they don’t create false statements or drive upcoding.
2. Consistent use of the same billing code
Another warning sign is when a provider always bills at the same level – even when the service has multiple possible codes depending on complexity. Payers expect variation. If claims data shows a provider routinely using one code or if a payer flags them as an outlier, it’s likely time for an internal audit.
3. Problematic quotas or targets
Productivity benchmarks aren’t inherently risky, but quotas that pressure providers to perform a specific number of procedures or referrals can be. In this case, physicians were allegedly given minimum numbers of debridements to perform each day, which could encourage medically unnecessary services. Compliance professionals should understand how internal targets or goals are set and ensure they don’t create incentives that conflict with medical necessity or appropriate billing requirements.
The Bottom Line
Stay alert for restrictive EMR design, coding that lacks variability, and productivity goals that may incentivize problematic behavior, such as ordering or providing unnecessary services. Addressing these red flags early can help organizations maintain compliant billing practices and avoid costly scrutiny.
For more information about the False Claims Act, check out these episodes:
Ep. 24 – Defensive Documentation to Avoid False Claims Act Liability
Ep. 61 – Three Compliance Lessons from a False Claims Act Verdict
